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Most power generating plants are on rivers where there is a large drop in elevation. The dam has an intake near the bottom of the wall that allows water to flow through the opening. Gravity causes the water to flow. As it encounters the blades of the turbine, the energy of the flowing water is converted to mechanical energy. As the turbine turns the generator, magnets pass by coils of wire to convert mechanical energy into electrical energy.

As long as there is water in the reservoir, the generating plant is able to respond to the demand for electricity. When demand drops, a valve decreases the size of the opening at the bottom of the dam to slow the water flow, movement of the turbine and electricity the generator produces. As demand increases, the valve opens to maximize generation.

Small hydroelectric generators have the potential for use on farms, ranches and homes. Because these micro-hydroelectric generators are not producing electricity for hundreds of homes, a small stream is often all that is needed to provide the water power.